Suarah Petroleum Group moots joint authority on state’s O&G matters
KUCHI NG: T he Sua ra h Petroleum Group ( SPG) is proposing that a Joint Oil And Gas Development Authority (Jogda) be created, comprising the state and federal governments and Petronas in the period when devolution of authorities and negotiations on oil and gas (O& G) rights are taking place between the state and federal governments.
Its president Hamim Yusuf said Jogda should be a platform where all strategic matters concerning Sarawak’ s O& G matters, including new product ion sharing contract ( PSC) awards and sale or transfer of interests, are deliberated.
“There are many experienced and qual i f ied Sarawakians willing to lend their expertise to a s si s t and suppor t the government of Sarawak in the setting up of Jogda in the spirit of ‘ Saya Peduli’ ( I Care) towards maximising Sarawak’s socio- economic benef it and safeguarding its rights in the O& G industry for its present and future generations,” he told The Borneo Post yesterday.
In stressing that Sarawak must not lose anymore of its precious O& G assets to rentseeking entities or interests, Hamim said until and unless Sarawak takes firm and decisive action, the state remains a mere spectator at the mercy of others.
SPG is echoing the words of former chief minister, the late Datuk Patinggi Tan Sri Adenan Satem and similar sentiments by present Chief Minister Datuk Amar Abang Johari Tun Openg, that any proposed ‘sale’ of Sarawak O& G assets by the party that is supposed to have the ‘ vested interest’ of Sarawak in mind without the apparent knowledge of the government and people of Sarawak shows the ‘ tidak peduli’ (don’t care) attitude of the parties involved.
“Or more intriguing than this, questions may be raised as to why it is only Sarawak’s O& G assets that are the prime target for such selling- off; and could Petronas be undertaking a backdoor sale of Sarawak’s oil and gas assets as an exit strategy before the state can get its hands back on those assets?”
“Also, would not such sales reduce further even the measly royalties that Sarawak is now getting? Would such sales by Petronas while negotiations are ongoing with the state government in regard to devolution and return of those assets not be in bad faith?”
Reuters on Feb 20 this year reported in Singapore that Petronas was aiming to sell its 49 per cent stake in the SK316 offshore gas block in Sarawak for up to US$1 billion, seeking to raise cash and cut development costs.
According to its sources, Petronas was said to be working with an investment bank on the stake sale and the process was kicked off in Feb this year.
However, on Feb 21 this year, a national daily reported that Petronas president and chief executive officer Datuk Wan Zulkiflee Wan Ariffin denied the report by Reuters, stating that Petronas had a cash balance of RM130 billion and that there was no need to sell to get money.
Block SK316, located approximately 180 kilometres north of Bintulu, is operated by Petronas and contains a number of gas fields including the NC3 field which feeds Malaysia’s liquefied natural gas ( LNG) export project, known as MLNG Train 9.
In 2011 and 2012, Petronas reported that Kasawari-1 and NC8SW-1 were the latest wells drilled in Block SK316 and were significant gas discoveries. The Kasawari field had over five trillion standard cubic feet (TSCF) with an estimated recoverable hydrocarbon resource of just over three TSCF, making it one of the largest non- associated gas fields in Malaysia.
The recoverable resource for the NC8SW field is estimated at more than 450 billion standard cubic feet of gas.
Putting aside the argument of whether Petronas is selling off Sarawak’s O& G resources, whether illegally or unconstitutionally acquired or whether it has the right to do so by seeking investments for a minority stake in SK316, Hamim said there indeed exists the potential for the State of Sarawak (or through one of its vehicles) to consider having a substantial and more meaningful participation in the upstream PSCs, all the more where PSCs are either expiring, expired or where operators withdraw.
“This has to be done through proper O& G due diligence process including examination of both technical and financial aspects of the PSC. However, the more urgent question remains whether the State of Sarawak is content to continue to be mere spectator, or wants to become an active participant in the development of the O& G resources of Sarawak.”